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Sunday, March 19, 2023
Dead Bodies, Convicted Felons and Kakaako Makai: Meet the new Gang at OHA
By Andrew Walden @ 12:20 AM :: 6739 Views :: Ethics, Development, OHA

by Andrew Walden

Meet the new gang at OHA.  They’ve got a new plan.  Give all the money to an unqualified ‘consultant’ and then let him redistribute it to the new insiders, thus evading OHA’s transparency requirements.

It’s a long story, but it includes lots of dead bodies, one ex-Governor, two current OHA trustees, at least one convicted felon, and Brian Schatz’ wife.

As long as Rep Scott Saiki is Speaker of the House, it is inconceivable that any Kaka’ako Makai up-zone will gain legislative approval.  Saiki represents Kaka’ako Makai and he knows his constituents would throw him out if he allowed OHA to block their ocean views.

A decade of history shows the Office of Hawaiian Affairs has only one plan for its Kaka’ako Makai parcels--use them as an excuse to funnel millions of dollars to cronies in the form of nebulous ‘planning’ and ‘design’ contracts.

Between December, 2014, and August, 2016, while Kamana’o Crabbe was OHA CEO, at least $2.9M flowed to Senator Dela Cruz WCIT/DTL operation. (See OHA Audit #23-04, pg 46.)

Ironically, Mililani Trask, in 2016, filed an ethics complaint outlining Crabbe administration cash flows to WCIT/DTL.

Crabbe spent his last month hiding from auditors until his June 30, 2019 resignation took effect.

What happened to Kakaako Makai contracts after Crabbe was ousted? 

OHA Trustees have been funneling money to something called Kuilei Consulting Inc. since 2021.

(UPDATE:  $1.2M -- Click for details.)

More recently, Senate Ways and Means Chair, Don Dela Cruz, March 2, 2023, deferred OHA’s pretend effort to up-zone its Kaka’ako Makai properties.  Dela Cruz then advanced his and OHA’s real agenda by inserting Kaka’ako white-collar make-work money into SB1235: $65M for Kaka’ako seawall repairs, $6M for an EIS on OHAs proposed Kaka’ako Maka’i development, and $13M for plans to preserve the land around Kukaniloko Birthstones in Wahiawa.

According to Civil Beat, OHA Chair Carmen Hulu Lindsey said, “We greatly appreciate what Senator Dela Cruz is trying to do. And we thank him.”

Obviously, OHA intends that Dela Cruz’ company, DTL, “A Hawaiian Strategy Studio”, will get a big chunk of that $84M.

And, this time, Trask won’t be filing any ethics complaints.

The Hawaii State Auditor’s March, 2023, Audit of the Office of Hawaiian Affairs (page 47) runs down the timeline:

September 2021 --  OHA retains another consultant, Kuilei Consulting Inc. (Kuilei), for $200,000. Duties include a review of Kaka‘ako Makai’s vision plan, summarizing, and synthesizing the work performed by OHA’s previous consultant. Kuilei is also to assist OHA in developing a vision that integrates financial feasibility, political reality, community and stakeholder input, and other goals deemed relevant by OHA. The contract terms end on September 20, 2023.

February 2022 -- OHA revises its contract with Kuilei, increasing the number of contract hours per month from 60 hours to 240 hours. As a result, compensation increases from $200,000 to $800,000.

March 2022 -- OHA revises its Kuilei contract once again, this time to add $400,000 in costs associated with the development of an interim use of Lot A, a parcel along Ward Avenue and adjacent to the Kaka‘ako waterfront. The interim development is to accommodate space for 33 food trucks; picnic tables; a multipurpose tent to accommodate banquet seating for 300-plus people as well as 550 parking stalls. (See “Under the Big Top” on page 49.) The contract maximum is now $1.2 million.

April 2022 -- Costs associated with Lot A increase by another $2.3 million for a total of $3.5 million. According to OHA, accommodating banquet seating for 300- plus people requires two tents. OHA budgeted a main tent (80’ x 160’) for $500,000 along with a second tent (30’ x 40’) for $200,000. Unfortunately, because of the large sizes of the tents, the use of Lot A no longer qualifies as “interim” and OHA is forced to sell the tents and must develop an alternate use. OHA expects its use of Lot A will still involve food trucks.

September 2022 -- OHA’s Joint Committee on Resource Management and Beneficiary Advocacy and Empowerment discuss proposed actions for the 2023 legislative session, including a new effort to seek repeal of the residential prohibition. The joint committee recommends approval of an additional $1.3 million “estimated outreach budget” for OHA’s consultant Kuilei. Among other things, the proposed budget earmarks more than $540,000 to promote and publicize the residential repeal campaign: $132,000 for a third-party communications consultant, $231,000 for marketing, and $191,000 for advertising.

According to DCCA BREG, Kuilei Consulting Inc. incorporated April 2, 2021 listing Kumu Hula, realtor, and registered lobbyist, Karl ‘Veto’ Baker as its agent and sole officer and Baker’s home address as corporate address.  Kuilei’s annual report, dated April 1, 2022, again lists Baker as the only officer, but is signed by Charish ‘Kawehi’ Correa “authorized officer, attorney-in-fact for an officer….”

(1978: Karl Baker's brother Arthur Baker murdered by Ronnie Ching.) 

Baker’s byline appears on a November 30, 2022, Civil Beat commentary titled: “Understanding OHA’s Plans For Kakaako Makai.”

Civil Beat, December 27, 2022, outlines some Kuilei connections:

Baker, the CEO of OHA’s current consultant Kuilei, said that the entity was formed for the sole purpose of working on a Kakaako Makai contract for OHA.

State business records show Baker registered Kuilei Consulting LLC in April 2021, three months before a request for proposals went out for an “In House Development Consultant” for OHA.

The RFP called for a company with eight years of experience navigating processes in the Hawaii Community Development Authority and the City and County of Honolulu as well as 10 years negotiating complex real estate agreements.

Baker spent much of his professional career selling mortgages, according to clips from local newspapers. He is also a kumu hula and Nā Hōkū Hanohano award winner.

Carmen Hulu Lindsey, chairwoman of the OHA Board of Trustees, says that Kuilei includes members who meet all the requirements of the RFP.

It’s not Baker.  Therefore Hulu Lindsey admits to knowing who the secret backers are.  Civil Beat continues:

Baker declined to say what entities or organizations are involved in Kuilei.

“I’m not sure if I can say their names,” he said. “Sometimes these people like to be in the background. I’d hate to say something and somebody get’s upset at me.”

Baker admits to hiding the names of the secret backers, but Civil Beat did identify a few:

Some Kuilei staff are listed in meeting minutes for the OHA Board of Trustees. They include Peter Gilpatric, who according to his LinkedIn profile is a real estate advisor. They also include Michael Yee, a Hawaii real estate consultant, and Linda Schatz, who also does consulting work for developers and is U.S. Sen. Brian Schatz’s wife.

The firm Kaiwi‘ula Strategies has also done social media under a subcontract for Kuilei. State Senate spokesman Jacob Aki is a part owner of Kaiwi‘ula but said in an interview earlier this year that his business partner is handling work on that contract.

Lobbyist Ann Chung, who counts e-cigarette companies among her clients, was also registered to lobby for Kuilei….

BREG lists only two ‘managers’ for Kaiwi‘ula Strategies, Aki and former OHA Community Outreach Advocate, Kainoa Kaumeheiwa-Rego.

Baker is also a member of the UH Cancer Center Native Hawaiian Community Advisory Board.  UH Cancer Center directly adjoins OHA’s Kakaako Makai parcels.

In addition to working together on Kuilei, Baker and Correa are, per BREG, the only named officers of “Pacific Funeral Holdings Corp” dba ‘Aloha Mortuary’ which describes itself as “an after life care holding company.”  Correa, CNHA, and several OHA Trustees are among those testifying in favor of 2022 HB1894, “Relating to Human Remains.”  Taking effect on approval and signed into law July 12, 2022, as Act 294, the bill provides for “water cremation.”  Judging by Aloha Mortuary’s Yelp reviews, cremation has quickly become a real money-spinner for the company. 

2007: Funeral trusts take 30% off the top

Correa was also listed, from 2019-2021, as ‘Agent’ for Ho’ala Group, LLC, which was headquartered at the Pacific Heights home address of convicted Unity House fraudster Roberta Cabral.  The only ‘Officer’ listed for Ho’ala Group, LLC is Mun-Wong Chang.

Chang, is a Director of so-called Pacific Regional Disaster Preparedness Center (PRDPC).  Other Board members include OHA Trustee and ex-Senator Brickwood Galuteria, Board Chair, former Governor John Waihee, and Chang’s husband, Paul Schultz.

Waihee 2011: State Sues to Get Back $39M Looted from Graves by John Waihee

Galuteria 2014: Kakaako: How to Buy Hawaii State Senators--Legally.

Chang and Schultz are co-owners of Hawaiya Technologies, Inc., famous mostly for a 2011 scheme to sell a useless, overpriced drone to the Harbor Department.  Hawaii Reporter’s Jim Dooley tells the story:

After the drone was delivered, a key state official who oversaw Hawaiya’s work for the state, Kelvin Ogata, left his state job and went to work for a nonprofit company headed by Hawaiya owners Schultz and Mun Won Chang.

Schultz and Chang were the subjects of a long-running investigation conducted by the Naval Criminal Investigation Service concerning expenditure of Navy research funds when Schultz served as a U.S. Navy Rear Admiral and Chang worked as a civilian Navy employee.

Both left government service with no charges filed against them. Schultz was reduced in rank to captain before he retired. The pair are now married and active in local Democratic Party politics.

Schultz and Chang are business associates of former Hawaii Governor John Waihee. A company in which all three are involved, Aina Kai Environmental, performed subcontracting work on Hawaiya Technologies’ state harbor contract, according to records on file with the State Civil Defense Division.

Correa testified before OHA Trustees, February 23, 2022, in favor of selecting Mililani Trask to replace resigned Trustee Keola Lindsey.  Trask was selected the very next day.

Correa, on March 17, 2022, was named an officer in Roberta Cabral’s notorious ‘Innovations Development Group’ (IDG). 

On May 21, 2022, Correa registered ‘Waika Consulting’ with DCCA listing herself as sole ‘manager.’  On January 16, 2023, Correa added IDG as a second manager.

Cabral pled guilty to four Unity House related felonies in 2002. The details of her plea bargain are explained by the US Department of Justice, June 17, 2002:

According to the plea agreement filed with the court, CABRAL willfully failed to file a federal or State of Hawaii income tax return for the tax year 1994 during which year she received gross income in excess of $50,000 in commissions from North Pacific Investments, Inc. for her participation in a $10 million dollar offshore investment scheme entered into by Unity House, Inc. Furthermore, CABRAL admitted in her plea agreement that the money she received for her participation in that scheme were wire transferred to her through a British Virgin Islands corporation controlled by CABRAL and used by her for the concealment of income.

CABRAL further admitted in the plea agreement that she created HONUA Group, LLC, through an unindicted nominee and opened a bank account on November 14, 1997, using her brother's social security number, in order to hide income she received, and in a willful attempt to evade over $118,657.00 in taxes she owed for the calendar years 1992 and 1993. CABRAL also admitted in the plea agreement to participating in a scheme to defraud Unity House, Inc. with her now deceased co-defendant Roderick Rodriquez. As also outlined in her plea agreement, CABRAL devised with Rodriquez a scheme to "pad" the budget of a one-hour television project funded by Unity House, Inc. entitled "Heavenly Road", later known as "Blue Hawaii", for which she was to receive a kickback of $150,000.

OHA’s latest Kakaako Makai campaign also features expensive ‘sponsored’ TV shows aimed at gathering petition signatures. So far a piddling 1,643 have signed, but insiders surely got paid for producing the shows and the lavish ad buys garner TV stations’ silence.

Roberta Cabral and Mililani Trask spent years siphoning OHA money to back IDG’s Puna geothermal scheme. After receiving supportive testimony from Richard Ha, Rep. Denny Coffman, Rep. Mark Nakashima, Sen. Malama Solomon, and Sen. Gil Kahele, OHA Trustees voted 6-1 April 18, 2013 to 'invest' $1.25M in the then-insolvent IDG, with an initial payment of $600K. According to IDG's spokesperson, cartoonish progressive columnist Dawn Morais Webster, Pierre Omidyar's Ulupono Initiative was also 'investing' in IDG

Geothermal and IDG are back before the Hawaiian Homes Commission.  Hawaii News Now, February 23, 2023, reports

The Hawaiian Homes Commission is mulling a proposal to invest $2 million to develop a geothermal project on their lands using money that was appropriated to build homes.

In a letter to the DHHL, state Sen. Donovan Dela Cruz, chair of the Senate Ways and Means Committee, said investing in geothermal will generate more income for the trust to build more homes for Native Hawaiians.

“What we want to try to do is provide options ... so that people can see how they might be able to use a $600 million as a base and grow it with projects that can bring in additional revenue,” said Dela Cruz….

The Hawaiian Homes Commission on Tuesday, Feb 21, 2023, voted not to support the proposal.

But on Wednesday, it said it would take another look at the plan next month.

Supporters said a New Zealand company IDG — which has developed geothermal projects with the Indigenous Maori people — is interested in partnering with the DHHL.

They said that if the project gets the green light, the DHHL and IDG can apply for up to $150 million in federal energy grants.

“This is a real step toward economic self-sufficiency for DHHL to own a renewable green energy, firm power, that benefits the Home Land’s economic security,” said former state Sen. Malama Solomon….

To build a traditional geothermal plant, the DHHL, and its partners will also have to build an undersea cable from the Big Island to Oahu, where most of the demand is.

The last time the state tried to do that a decade ago, the price tag was about $1 billion.

IDG and Honua Group controlled Cal Lee's unsuccessful 2012 challenge to former OHA Chair Haunani Apoliona.  Fortuitously, in 2016, Grassroot Institute President, Keli’i Akina--endorsed by Malama Solomon--defeated Apoliona.  Akina was reelected in 2020, defeating candidate Jason Keoni Souza, whose campaign committee was chaired by Michael Miske’s lawyer, Thomas Otake.

---30---

IDG BACKGROUND:

Linda Schatz:

Kakaako Makai:

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